EXHIBIT 1.2
PERFORMANCE FOOD GROUP COMPANY
(a Tennessee corporation)
5-1/2% Convertible Subordinated Notes due 2008
PURCHASE AGREEMENT
Dated: October 10, 2001
TABLE OF CONTENTS
Page
SECTION 1. Representations and Warranties....................................... 4
SECTION 2. Sale and Delivery to Underwriters; Closing........................... 17
SECTION 3. Covenants of the Company............................................. 19
SECTION 4. Payment of Expenses.................................................. 22
SECTION 5. Conditions of Underwriters' Obligations.............................. 23
SECTION 6. Indemnification...................................................... 28
SECTION 7. Contribution......................................................... 31
SECTION 8. Representations, Warranties and Agreements to Survive Delivery....... 32
SECTION 9. Termination of Agreement............................................. 32
SECTION 10.Default by One or More of the Underwriters........................... 33
SECTION 11.Notices.............................................................. 34
SECTION 12.Parties.............................................................. 34
SECTION 13.GOVERNING LAW AND TIME............................................... 34
SECTION 14.Effect of Headings................................................... 34
SCHEDULES
Schedule A - List of Underwriters.............................................. Sch A-1
Schedule B - Pricing Information............................................... Sch B-1
Schedule C - List of Subsidiaries.............................................. Sch C-1
Schedule D - List of Persons Subject to Lock-up................................ Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.............................. A-1
Exhibit B-1 - Form of Opinion of In-House Counsel to FE......................... B-1-1
Exhibit B-2 - Form of Opinion of Gibson, Dunn & Crutcher........................ B-2-1
Exhibit C - Form of Lock-up Letter............................................ C-1
Exhibit D - Form of Lock-up Letters for SFC Stockholders...................... D-1
Exhibit E-1 - Form of Georgia Counsel Opinion................................... E-1-1
Exhibit E-2 - Form of Texas Counsel Opinion..................................... E-2-1
Exhibit E-3 - Form of Virginia Counsel Opinion.................................. E-3-1
Exhibit E-4 - [Omitted Intentionally]........................................... E-4-1
Exhibit E-5 - Form of Illinois Counsel Opinion.................................. E-5-1
Exhibit E-6 - Form of Florida Counsel Opinion................................... E-6-1
Exhibit E-7 - Form of Massachusetts Counsel Opinion............................. E-7-1
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PERFORMANCE FOOD GROUP COMPANY
(a Tennessee corporation)
5-1/2% Convertible Subordinated Notes due 2008
PURCHASE AGREEMENT
October 10, 2001
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
First Union Securities, Inc.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
SunTrust Capital Markets, Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Performance Food Group Company, a Tennessee corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch, First Union Securities, Inc., Credit
Suisse First Boston Corporation, Banc of America Securities LLC and SunTrust
Capital Markets, Inc. are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective principal amounts set forth in said Schedule A of the Company's
5-1/2% Convertible Subordinated Notes due 2008 (the "Notes"), and with respect
to the grant by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of an additional $26,250,000 principal amount of Notes to cover
over-allotments, if any. The aforesaid $175,000,000 principal amount of Notes
(the "Initial Securities") to be purchased by the Underwriters and all or any
part of the $26,250,000 principal amount of Notes subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities". The Securities will be issued pursuant
to an indenture (the "Original Indenture"), as amended and supplemented by a
First Supplemental Indenture thereto (the "First Supplemental Indenture"; the
Original Indenture, as amended and supplemented by the First Supplemental
Indenture, is hereinafter called the
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"Indenture"), each dated as of October 16, 2001 between the Company and Bank One
Trust Company, N.A., as trustee (the "Trustee").
The Securities will be convertible into shares of common stock, par
value $.01 per share, of the Company (the "Common Stock") in accordance with the
terms of the Securities and the Indenture, at the initial conversion price
specified in Schedule B hereto.
The Company has entered into an Agreement and Plan of Merger dated as
of August 9, 2001, as amended by Amendment No. 1 thereto dated as of August 30,
2001 (as the same may have been further amended or supplemented or may hereafter
be amended or supplemented from time to time and including all exhibits,
schedules and attachments thereto, the "FE Acquisition Agreement"), among the
Company, Fresh International Corp., a Delaware corporation ("FE"), and PFGC
Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of the
Company ("FE Acquisition Sub"), pursuant to which FE Acquisition Sub will merge
with and into FE. The Company has previously entered into an Agreement and Plan
of Merger dated July 25, 2001 (as the same may have been amended or supplemented
or may hereafter be amended or supplemented from time to time and including all
exhibits, schedules and attachments thereto, the "SFC Acquisition Agreement" ;
the FE Acquisition Agreement and the SFC Acquisition Agreement are hereinafter
called, collectively, the "Acquisition Agreements" and, individually, an
"Acquisition Agreement") among the Company, Springfield Foodservice Corporation,
a Massachusetts corporation ("SFC"), the shareholders (individually an "SFC
Stockholder" and, collectively, the "SFC Stockholders") of SFC, and SFC
Acquisition, Inc., a Massachusetts corporation and wholly-owned subsidiary of
the Company ("SFC Acquisition Sub"; SFC Acquisition Sub and FE Acquisition Sub
are hereinafter called, collectively, the "Acquisition Subs" and, individually,
an "Acquisition Sub"), pursuant to which SFC was merged with and into SFC
Acquisition Sub. The pending merger of FE Acquisition Sub with and into FE,
pursuant to which FE, as the surviving corporation, will become a wholly-owned
subsidiary of the Company, is hereinafter called the "FE Acquisition" or the "FE
Merger"; the merger of SFC with and into SFC Acquisition Sub, with SFC
Acquisition Sub as the surviving corporation and pursuant to which the separate
corporate existence of SFC ceased, is hereinafter called the "SFC Acquisition"
or the "SFC Merger"; the FE Acquisition and the SFC Acquisition are hereinafter
called, collectively, the "Acquisitions" and, individually, an "Acquisition"; FE
(including its subsidiaries) and SFC are hereinafter sometimes called,
collectively, the "Acquired Companies" and individually, an "Acquired Company" ;
the holders of the outstanding shares of capital stock of FE are hereinafter
called, collectively, the "FE Stockholders" and, individually, an "FE
Stockholder"); the persons or entities who received or who are entitled to
receive any shares of the Company's Common Stock issued or issuable pursuant to
the SFC Acquisition Agreement are hereinafter called, collectively, the "SFC
Stockholders" and, individually, an "SFC Stockholder"; the shares of the
Company's common stock which have been or may hereafter be issued pursuant to
the SFC Acquisition Agreement are hereinafter called the "SFC Shares"; the
Voting Agreement dated as of August 9, 2001 among the stockholders of FE party
thereto and the Company is hereinafter called the "Voting Agreement"; and the
certificate of merger, merger agreement or other instrument or agreement to be
filed with the Secretary of State of the State of Delaware (the "Secretary of
State") to effectuate the FE Merger is hereinafter called the "Certificate of
Merger".
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It is understood that the Company is concurrently entering into a
Purchase Agreement dated the date hereof (the "Other Agreement") with Merrill
Lynch and the other underwriters named in Schedule A thereto (the "Other
Underwriters") relating to the offering by the Company of 5,750,000 shares of
Common Stock (the "Other Securities"), including up to 750,000 shares of Common
Stock which may be purchased by the Other Underwriters pursuant to their
over-allotment option.
In connection with the FE Acquisition and the transactions contemplated
by this Agreement and the Other Agreement, (A) the Company has, prior to the
date of this Agreement, obtained certain consents (collectively, the "Synthetic
Lease Consents") under the Lease Agreement dated as of June 9, 2000 among First
Security National Bank, National Association, as lessor, and the other parties
thereto and the Lease Agreement dated as of August 29, 1997 between First
Security National Bank, National Association, as lessor and the Company, as
lessee, in each case together with all amendments, supplements (including lease
supplements) or modifications thereof and any leases, purchase agreements and
other instruments or agreements entered into by the Company or any of its
subsidiaries in connection therewith (collectively, the "Synthetic Lease
Facilities"), which Synthetic Lease Consents will become effective concurrently
with the purchase of the Initial Securities by the Underwriters under this
Agreement, and (B) the Company will, concurrently with the purchase of the
Initial Securities by the Underwriters under this Agreement, either (A) enter
into a new $200 million Credit Agreement with First Union National Bank, as
administrative agent, and the other parties thereto (the "New Credit Agreement",
which term includes any promissory notes, pledge agreements, guarantees or other
instruments or agreements entered into by the Company or any of its subsidiaries
in connection therewith) or (B) enter into a Sixth Amendment (the "Credit
Agreement Amendment") to the Existing Credit Agreement (as defined below).
The sale of the Initial Securities to the Underwriters pursuant to this
Agreement is conditioned upon, among other things (i) the concurrent purchase of
the Other Securities by the Other Underwriters pursuant to the Other Agreement,
(ii) the concurrent effectiveness of the FE Merger, (iii) the concurrent
effectiveness of the New Credit Agreement or the Credit Agreement Amendment and
(iv) the concurrent effectiveness of the Synthetic Lease Consents.
As used in this Agreement, the term "Company Documents" means this
Agreement, the Other Agreement, the Securities, the Indenture, the FE
Acquisition Agreement, the Certificate of Merger, the Voting Agreement, the
Synthetic Lease Consents and either the New Credit Agreement or the Credit
Agreement Amendment (whichever shall be entered into concurrently with the
purchase of the Initial Securities by the Underwriters); "Company Document"
means any of the Company Documents; and "Existing Credit Agreement" means the
Credit Agreement dated as of March 5, 1999, as amended, among the Company, the
lenders party thereto and First Union National Bank, as administrative agent,
including any promissory notes, pledge agreements, guarantees and other
instruments or agreements entered into by Company or any of its subsidiaries in
connection therewith. The Other Agreement is sometimes referred to as the
"Common Stock Agreement".
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed
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and delivered and the Indenture has been qualified under the Trust Indenture Act
of 1939, as amended.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-48462) and a
subsequent registration statement on Form S-3 (No. 333-63610) covering the
registration of, among other things, the Securities under the Securities Act of
1933, as amended (the "1933 Act"). Such registration statements, in each case
including the exhibits thereto, the schedules thereto, if any, and the documents
incorporated or deemed to be incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act, as amended (if applicable) at the respective
times they became effective, are herein called, collectively, the "Registration
Statements" and, individually, a "Registration Statement". Any related
registration statement filed by the Company pursuant to Rule 462(b) of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" and "Registration
Statements" shall include the Rule 462(b) Registration Statement. Promptly after
the execution of this Agreement, the Company will file with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations a prospectus supplement
relating to the Securities (the "Prospectus Supplement"), together with the
related prospectus dated October 10, 2001 (the "Base Prospectus"), and the
Company has previously advised you of all information (financial and other) that
will be set forth therein. The Prospectus Supplement and the Base Prospectus,
including all documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities, are hereinafter referred to, collectively, as the "Prospectus." Each
prospectus supplement relating to the Securities used prior to the date of this
Agreement, together with the related prospectus and all documents incorporated
or deemed to be incorporated by reference therein pursuant to Item 12 of Form
S-3, are hereinafter referred to, collectively, as a "preliminary prospectus".
For purposes of this Agreement, all references to any Registration Statement,
any preliminary prospectus, the Prospectus or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering Analysis and Retrieval system
("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in any
Registration Statement, any preliminary prospectus or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in any Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to any Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated or deemed to be incorporated by
reference in such Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statements and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of any Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statements, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statements,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the Trust Indenture Act of 1939, as amended (the "1939 Act"), and the
rules and regulations of the Commission under the 1939 Act (the "1939
Act Regulations"), and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement
was issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statements or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statements or Prospectus.
Each preliminary prospectus and the prospectus filed as part of any
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied
when so filed in all material respects with the 1933 Act Regulations
and each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statements and the
Prospectus, at the time
5
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission thereunder (the "1934
Act Regulations"), and, when read together with the other information
in the Prospectus, at the respective times the Registration Statements
became effective, at the time the Prospectus was issued and at the
Closing Time (and if any Option Securities are purchased, at the Date
of Delivery), did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the
Registration Statements and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements of the Company
included in the Registration Statements and the Prospectus, together
with the related schedules (if any) and notes, present fairly the
financial position of the Company and its consolidated subsidiaries at
the dates indicated and the results of operations, stockholders' equity
and cash flows of the Company and its consolidated subsidiaries for the
periods specified; the financial statements of FE incorporated by
reference in the Registration Statements and the Prospectus, together
with the related schedules (if any) and notes, present fairly the
financial position of FE and its consolidated subsidiaries at the dates
indicated and the results of operations, stockholders' equity and cash
flows of FE and its consolidated subsidiaries for the periods
specified; and all of such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The ----
supporting schedules, if any, included in the Registration Statements
present fairly in accordance with GAAP the information required to be
stated therein. The selected historical financial data and the summary
historical financial information of the Company included in the
Prospectus present fairly the information shown therein and have been
compiled on an accounting basis consistent with that of the audited
financial statements of the Company included in the Registration
Statements and the Prospectus. The pro forma financial statements and
the related notes thereto included in the Registration Statements and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein; the summary pro forma financial data included in
the Prospectus presents fairly the information shown therein and has
been compiled on a basis consistent with that of the pro forma
financial statements included in the Registration Statements and the
Prospectus; the historical financial data appearing in the pro forma
financial statements included in the Prospectus under the caption
"Fresh Express Historical" presents fairly the financial position of FE
and its consolidated subsidiaries at the date indicated and the results
of operations of FE and its consolidated subsidiaries for the periods
specified and has been compiled on an accounting basis consistent with
that of the financial statements of FE incorporated by reference in the
Registration Statements and the Prospectus. The Company is not
6
required, under Regulation S-X or otherwise, to include or incorporate
by reference in the Registration Statements or the Prospectus or in any
of the documents incorporated or deemed to be incorporated by reference
therein financial statements for any of the Redi-Cut Entities (as
defined in Schedule C hereto) or for SFC.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statements
and the Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Company
Material Adverse Effect"), (B) there has been no material adverse
change in the assets, liabilities, financial condition, operations or
present or future relationships with customers of FE and its
subsidiaries taken as a whole (an "FE Material Adverse Effect"), (C)
there have been no transactions entered into by the Company or any of
its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, (D) to the Company's knowledge, there
have been no transactions entered into by FE or any of its
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the FE and its subsidiaries
considered as one enterprise, and (E) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock. As used in this Agreement, the term
"Material --------- Adverse Effect" means a Company Material Adverse
Effect or an FE Material Adverse Effect, and statements --------------
to the effect that there has not been or will not be a Material Adverse
Effect or that certain events or circumstances will not cause or result
in a Material Adverse Effect or other similar statements mean that
there has not been or will not be, as the case may be, or that such
event or circumstance will not cause or result in, as the case may be,
either a Company Material Adverse Effect or an FE Material Adverse
Effect or both. For purposes of this Agreement, all references to
"subsidiaries" of the Company shall include, without limitation, in the
case of any representation or warranty made or deemed to have been made
on or after the Closing Time, FE and its subsidiaries.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Tennessee and has power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Company Documents; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in the Commonwealth of Virginia and in each other jurisdiction
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the Company
has been duly organized and is validly existing as a corporation,
limited partnership or limited liability company, as the case may be,
in good standing under the laws of the jurisdiction of its
organization, has power and authority to own, lease and operate its
properties and to
7
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation, limited partnership or limited
liability company, as the case may be, to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statements, all of
the issued and outstanding capital stock of each such subsidiary that
is a corporation, all of the issued and outstanding partnership
interests of each such subsidiary that is a limited partnership and all
of the issued and outstanding limited liability company interests,
membership interests or other similar interests of each such subsidiary
that is a limited liability company have been duly authorized and
validly issued, are fully paid and non-assessable and are owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and none of the outstanding shares of capital stock,
partnerships interests or limited liability company interests,
membership interests or other similar interests of any such subsidiary
was issued in violation of any preemptive rights, rights of first
refusal or other similar rights of any securityholder of such
subsidiary. The only subsidiaries of the Company, other than FE and its
subsidiaries (which will become subsidiaries of the Company at the
Closing Time), are the subsidiaries listed on Schedule C hereto and
Schedule C accurately sets forth whether each such subsidiary is a
corporation, limited partnership or limited liability company and the
jurisdiction of organization of each such subsidiary.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to the Common Stock Agreement,
pursuant to employee benefit plans referred to in the Prospectus,
pursuant to the exercise of options referred to in the Prospectus, upon
the conversion of the Notes, and except for 1,270,652 shares of Common
Stock issued to the SFC Stockholders in connection with the SFC
Acquisition); the shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable; and none of the outstanding shares of capital stock
of the Company was issued in violation of any preemptive rights, rights
of first refusal or other similar rights of any securityholder of the
Company.
(ix) Authorization of Agreement. Each of this Agreement and the
Other Agreement has been duly authorized, executed and delivered by the
Company.
(x) Authorization and Description of Other Securities. The Other
Securities have been duly authorized for issuance and sale to the Other
Underwriters pursuant to the Other Agreement and, when issued and
delivered by the Company pursuant to the Other Agreement against
payment of the consideration set forth therein, will be validly issued,
fully paid and non-assessable; the Common Stock, the Company's
preferred stock, par value $.01 per share (the "Preferred Stock"), the
Company's authorized but unissued Series A preferred stock, par value
$.01 per share (the "Series A Preferred Stock"), the Company's charter
and by-laws, the Rights Agreement dated as of May 16, 1997 (the "Rights
Agreement"), as amended, between the Company and American Stock
Transfer
8
& Trust Company, as rights agent, and the stock purchase rights (the
"Rights") created under the Rights Agreement conform in all material
respects to all of the respective statements relating thereto contained
in the Prospectus and such statements conform to the rights set forth
in the respective instruments and agreements defining the same; no
holder of the Other Securities will be subject to personal liability by
reason of being such a holder; the issuance of the Other Securities is
not subject to any preemptive rights, rights of first refusal or other
similar rights of any securityholder of the Company; one Right has been
issued in respect of each outstanding share of Common Stock and is
evidenced by the certificate for that share of Common Stock and each
such Right has been duly authorized and validly issued; and one Right
will be issued in respect of each Other Security issued and sold to the
Other Underwriters and will be evidenced by the certificate for that
Other Security and each such Right has been duly authorized and, upon
issuance of such Other Security, will be validly issued.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its Organizational Documents (as
defined below) or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject (collectively, "Agreements and Instruments"),
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of the Company
Documents and the consummation of the transactions contemplated therein
and in the Registration Statements (including (A) the issuance and sale
of the Securities and the Other Securities and the use of the proceeds
from the sale of the Securities and the Other Securities as described
in the Prospectus under the caption "Use of Proceeds", (B) the
consummation of the FE Acquisition and (C) the issuance of the shares
of Common Stock upon conversion of the Securities) and compliance by
the Company and, in the case of the FE Acquisition Agreement, FE
Acquisition Sub with their respective obligations under the Company
Documents have been duly authorized by all necessary action, corporate
or other, and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in
any violation of the provisions of the Organizational Documents of the
Company or any of its subsidiaries or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of
their respective assets, properties or operations. As used herein,
"Organizational Documents" means, in the case of a corporation, its
charter and by-laws; in the case of a limited or general partnership,
(a) its partnership certificate, certificate of formation or similar
organizational document and (b) its partnership agreement; in the case
of a limited liability company, (c) its articles of organization,
certificate of formation or similar organizational document and (d) its
9
operating agreement, limited liability company agreement, membership
agreement or other similar agreement; in the case of a trust, its trust
agreement; and, in the case of any other entity, the organizational
documents of such entity; and a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any subsidiary of the
Company.
(xii) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any subsidiary of the Company exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
the principal suppliers, manufacturers, customers or contractors of the
Company or any of its subsidiaries which, in any such case, may
reasonably be expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any of its subsidiaries or, to the knowledge of the Company,
FE or any of its subsidiaries which is required to be disclosed in any
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the
transactions contemplated in any of the Company Documents or the
performance by the Company or, in the case of the FE Acquisition
Agreement, FE Acquisition Sub of their respective obligations under any
of the Company Documents; the aggregate of all pending legal or
governmental proceedings to which the Company or any of its
subsidiaries or, to the knowledge of the Company, FE or any of its
subsidiaries is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statements, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material
Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in any Registration Statement, the
Prospectus or the documents incorporated or deemed to be incorporated
by reference therein or to be filed as exhibits thereto which have not
been so described and filed as required.
(xv) Possession of Intellectual Property. Except as described in
the Prospectus, the Company and its subsidiaries and, to the knowledge
of the Company, FE and its subsidiaries own or possess, or can acquire
on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the businesses now operated by them, and neither the
Company nor any of its subsidiaries nor, to the knowledge of the
Company, FE or any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any
10
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries or, to the knowledge
of the Company, FE or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. (A) No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency, domestic or foreign, (B) no authorization, approval, vote or
other consent of any stockholder of, or other holder of an equity
interest in, the Company, FE Acquisition Sub or FE, and (C) no
authorization, approval, vote or other consent of any other person or
entity, is necessary or required for the performance by the Company or,
in the case of the FE Acquisition Agreement, FE Acquisition Sub of
their respective obligations under any of the Company Documents or, to
the knowledge of the Company, for the performance by FE of its
obligations under the FE Acquisition Agreement, for the offering,
issuance, sale or delivery of the Securities under this Agreement or
the Other Securities under the Other Agreement, for the issuance of the
shares of Common Stock upon conversion of the Securities, or for the
consummation of the FE Acquisition or any of the other transactions
contemplated by any of the Company Documents, in each case on the terms
contemplated by the Prospectus, except (i) such as have been already
obtained under the 1933 Act or the 1933 Act Regulations and except for
the qualification of the Indenture under the 1939 Act, which
qualification has been effected, (ii) such as may be required under
state securities laws or, in the event of a repurchase of Notes upon a
Change of Control (as defined in the Indenture), such as may be
required under the 1934 Act or the 1934 Act Regulations or, in the
event that the Company pays the Change of Control repurchase price with
shares of Common Stock, such as may be required under the 1933 Act or
the 1933 Act Regulations in connection with the issuance of those
shares, (iii) such as have been already obtained under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the
"HSR Act"), in connection with the FE Acquisition, (iv) the approval of
the FE Acquisition by vote of the holders of at least 60% of the
outstanding voting common stock of FE, which approval has been obtained
at a meeting of FE's stockholders duly called and held, and (v) the
filing of the Certificate of Merger with the Secretary of State, which
will occur concurrently with the issuance of the Initial Securities to
the Underwriters pursuant to this Agreement. Without limitation to the
foregoing, prior to the Closing Time the Company and FE and its
subsidiaries will have obtained all authorizations, approvals, consents
and waivers under (x) any credit agreements or other instruments or
agreements relating to or evidencing indebtedness for borrowed money,
leasing agreements (including, without limitation, the Synthetic Lease
Facilities), receivables purchase facilities, industrial revenue or
development bonds (and any documents relating thereto), letters of
credit and any related reimbursement or similar agreements or other
similar agreements (collectively, "Credit Agreements") to which the
Company or any of its subsidiaries is a party and (y) any pledge
agreements, guarantees or other instruments or agreements entered into
in connection with any Credit Agreements (collectively, "Ancillary
Agreements"), which in each case are necessary or required for the
performance by the Company of its obligations under any of the Company
Documents,
11
for the performance by the FE Acquisition Sub or FE of their respective
obligations under the FE Acquisition Agreement, for the offering,
issuance, sale or delivery of the Securities under this Agreement or of
the Other Securities under the Other Agreement, or for the consummation
of the FE Acquisition or any of the other transactions contemplated by
any of the Company Documents, in each case on the terms contemplated by
the Prospectus.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by any of them and
good title to all other properties owned by any of them, in each case,
free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company or
any of its subsidiaries; all of the leases and subleases material to
the business of the Company and its subsidiaries considered as one
enterprise and under which the Company or any of its subsidiaries holds
properties described in the Prospectus are in full force and effect;
and neither the Company nor any of its subsidiaries has any notice of
any claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its subsidiaries under any of the
leases or subleases mentioned above or affecting or questioning the
rights of the Company or any of its subsidiaries to the continued
possession of the leased or subleased premises under any such lease or
sublease except for such claims which, if successfully asserted against
the Company or any of its subsidiaries, would not singly or in the
aggregate have a Material Adverse Effect.
(xix) Compliance with Cuba Act. To the extent applicable, the
Company has complied with, and is and will be in compliance with, the
provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida
statutes, and the rules and regulations thereunder (collectively, the
"Cuba Act") or is exempt therefrom.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities and the Other Securities as
contemplated in this Agreement and
12
the Other Agreement and the application of the net proceeds therefrom
as described in the Prospectus and the consummation of the FE
Acquisition will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the Registration
Statements and except as would not, singly or in the aggregate, result
in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, FE nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have and, to the knowledge
of the Company, FE and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries or, to the knowledge of the Company, against FE or any of
its subsidiaries and (D) there are no events or circumstances that
might reasonably be expected to form the basis of an order for clean-up
or remediation, or an action, suit or proceeding by any private party
or governmental body or agency, against or affecting the Company or any
of its subsidiaries or, to the knowledge of the Company, against or
affecting FE or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.
(xxii) Absence of Registration Rights; Shelf Registration
Statement. There are no persons with registration rights or other
similar rights to have any securities (debt or equity) (A) registered
pursuant to either Registration Statement or included in the offering
contemplated by this Agreement or the Other Agreement or (B) otherwise
registered by the Company under the 1933 Act; and, except for the
Underwriters, the Other Underwriters and any other dealers involved in
the distribution of the Securities and the Other Securities, there are
no persons with rights to resell or otherwise transfer any securities
(debt or equity) pursuant to the Company's registration statement on
Form S-4 (Registration No. 333-24679), as amended if applicable (the
"First Shelf Registration Statement"), the Company's registration
statement on Form S-4 (Registration No. 333-68877), as amended if
applicable (the "Second Shelf Registration Statement"), the Company's
registration statement on Form S-4 (Registration No. 333-61612), as
amended if applicable (the "Third Shelf Registration Statement"), or
any other registration statement which the Company has filed or may
hereafter file under the 1933 Act, except for (a) the SFC Stockholders,
who have the right to resell the shares of
13
Common Stock they have received or may hereafter receive in the SFC
Acquisition pursuant to the Third Shelf Registration Statement upon
expiration of the lock-up agreements referred to in Section 1(a)(xxvi)
hereof, (b) the holders of 6,991,888 shares of Common Stock issued by
the Company to acquire other businesses, all of whom have the right to
resell those shares pursuant to the First, Second, or Third Shelf
Registration Statement, and (c) if applicable, the holders of up to
1,000,000 shares of Common Stock which the Company has the right to
issue upon the terms and subject to the conditions set forth in Section
3(j) of this Agreement.
(xxiii) Description of FE Acquisition Agreement. The FE Acquisition
Agreement conforms in all material respects to the statements relating
thereto contained in the Prospectus and the FE Acquisition Agreement is
in the form included or incorporated by reference as an exhibit to the
Registration Statements or to the documents incorporated or deemed to
be incorporated by reference in the Registration Statements. The FE
Acquisition Agreement (including, without limitation, the consideration
paid or to be paid in connection with such Acquisition, including any
consideration which may be payable in connection with any earn-out or
similar arrangement) conforms to the description thereof contained in
the Prospectus.
(xxiv) SFC Acquisition. The Company has paid in full the cash
portion of the purchase price that it was required to pay pursuant to
the SFC Acquisition Agreement and has issued the SFC Shares it was
required to issue pursuant to the SFC Acquisition, all in accordance
with the terms and provisions of the SFC Acquisition Agreement; and SFC
is a direct or indirect wholly-owned subsidiary of the Company.
(xxv) Acquisition Agreements. The FE Acquisition Agreement has been
duly authorized, executed and delivered by, and is a valid and binding
agreement of, each of the Company and FE Acquisition Sub and the Voting
Agreement has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, the Company, in each case enforceable
against the Company and, in the case of the Voting Agreement, FE
Acquisition Sub in accordance with its terms, except as enforcement
thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles; all of the representations and warranties made by the
Company, the Acquisition Subs, FE, SFC and the SFC Stockholders in or
pursuant to the respective Acquisition Agreements are true, complete
and correct; all conditions precedent to the consummation of the FE
Acquisition and to the obligations of the parties under the FE
Acquisition Agreement which have not already been satisfied will be
satisfied or waived at or prior to the Closing Time; the FE Merger will
become effective under the laws of the State of Delaware upon the
filing of the Certificate of Merger with the Secretary of State; prior
to the Closing Time, the Certificate of Merger will have been duly
authorized, executed and delivered by the parties thereto and will have
been pre-cleared by the Secretary of State; prior to or concurrently
with the purchase of the Initial Securities by the Underwriters
pursuant to this Agreement, the Certificate of Merger, in the form
required by and executed in accordance with the laws of the State of
Delaware and sufficient under the laws of the State of Delaware to
effect the FE Merger as contemplated by the Prospectus, shall have been
filed with and accepted by the Secretary
14
of State and any other governmental offices in which such filing may be
required, the Company shall have paid in full the purchase price
required pursuant to the FE Acquisition Agreement in accordance with
the terms and provisions of the FE Acquisition Agreement, the FE Merger
shall have become effective in accordance with the laws of the State of
Delaware and on the terms provided in the FE Acquisition Agreement and
described in the Prospectus, with FE surviving the FE Merger as a
wholly-owned direct or indirect subsidiary of the Company, and the
Company or FE shall have repaid or otherwise discharged all
indebtedness and liabilities of FE and its subsidiaries that the pro
forma financial statements included in the Prospectus indicate are to
be repaid or satisfied in connection with the FE Merger; upon
effectiveness of the FE Merger, each outstanding share of capital stock
of FE will be converted into the right to receive the applicable merger
consideration payable pursuant to the FE Acquisition Agreement, other
than shares owned by stockholders who have perfected their appraisal
rights under the Delaware General Corporation Law.
(xxvi) Parties to Lock-Up Agreements. Section A of Schedule D
hereto contains a true, complete and correct list of all directors and
executive officers of the Company, each of whom has executed and
delivered a lock-up agreement in the form of Exhibit C hereto, and
Section B of Schedule D hereto contains a true, complete and correct
list of all persons who have received or may in the future receive any
shares of Common Stock issued or to be issued by the Company in
connection with the SFC Acquisition, each of whom has executed and
delivered a lock-up agreement in the form of Exhibit D hereto. The
directors and executive officers listed in Section A of Schedule D
hereto constitute all of the directors and executive officers of the
Company referred to in Section 7.2 of the SFC Acquisition Agreement.
The Company has heretofore given the transfer agent and registrar for
the Common Stock stop transfer instructions with respect to all of the
SFC Shares which have been or may hereafter be issued and, during the
period commencing on the date of this Agreement through and including
the earlier of (A) the 120th day after September 10, 2001 and (B) the
90th day after the date of this Agreement, the Company will not rescind
or revoke those stop transfer instructions without the prior written
consent of Merrill Lynch.
(xxvii) If, notwithstanding the choice of law provisions which
specify that New York law is to govern the Notes and the Indenture, a
court were to find that Tennessee law governed the Notes or the
Indenture, the Notes would not violate the Tennessee usury law or any
other limitations on the rate of interest or yield thereon under the
laws of the State of Tennessee.
(xxviii) [OMITTED INTENTIONALLY]
(xxix) Synthetic Lease Consents; New Credit Agreement; Credit
Agreement Amendment. The Synthetic Lease Consents have been executed by
such of the parties to the Synthetic Lease Facilities as the terms of
the Synthetic Lease Facilities require for the effectiveness of the
consents and changes to the Synthetic Lease Facilities that are set
forth in the Synthetic Lease Consents; upon effectiveness of the New
Credit Agreement, the Synthetic Lease Facilities will incorporate by
reference either the covenants in the New Credit Agreement instead of
the covenants in the Existing Credit Agreement or the
15
covenants in the Existing Credit Agreement, as amended by the Credit
Agreement Amendment and the other amendments thereto, and the Synthetic
Lease Consents will be effective and in full force and effect. The New
Credit Agreement and the Credit Agreement Amendment have been duly
authorized by the Company and, concurrently with the issuance and
delivery of the Initial Securities to the Underwriters pursuant to this
Agreement, either the New Credit Agreement or the Credit Agreement
Amendment will have been duly executed and delivered by, and will be a
valid and binding agreement of, the Company, enforceable against the
Company in accordance with its terms, except as enforcement thereof may
be subject to or limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles; and, if the
Company shall have entered into the New Credit Agreement, the Company
will have satisfied all conditions to the closing and initial
extensions of credit under the New Credit Agreement or such conditions
shall have been waived, all outstanding borrowings and letters of
credit under the Existing Credit Agreement will have been repaid or
replaced, as the case may be, with borrowings and letters of credit
under the New Credit Agreement and the Existing Credit Agreement shall
have been terminated and all entities which are required to enter into
the Guaranty Agreement (the "Guaranty Agreement") pursuant to the New
Credit Agreement shall have duly authorized, executed and delivered the
Guaranty Agreement, and the Guaranty Agreement shall be a valid and
binding obligation of the parties thereto, enforceable against such
parties in accordance with its terms, except as enforcement thereof may
be subject to or limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles.
(xxx) The Trustee has duly filed with the Commission a statement of
eligibility and qualification in accordance with Section 305(b)(2) of
the 1939 Act.
(xxxi) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and duly qualified under the 1939 Act and, at
the Closing Time, will have been duly executed and delivered by the
Company and will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles.
(xxxii) Authorization of the Securities. The Securities have been
duly authorized and, at the Closing Time and at each Date of Delivery
(if any), will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided in this
Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be subject to or limited
by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles, and will be in the form contemplated by, and
entitled to the benefits of, the Indenture.
16
(xxxiii) Description of the Securities and the Indenture. The
Securities and the Indenture will conform to the respective statements
relating thereto contained in the Prospectus and will be in
substantially the respective forms filed or incorporated by reference,
as the case may be, as exhibits to the Registration Statements.
(xxxiv) Authorization of Common Stock. Upon issuance and delivery
of the Securities in accordance with this Agreement and the Indenture,
the Securities will be convertible at the option of the holders thereof
into shares of Common Stock in accordance with the terms of the
Securities and the Indenture; the shares of Common Stock issuable upon
conversion of the Securities have been duly authorized and reserved for
issuance upon such conversion by all necessary corporate action and
such shares, when issued upon such conversion, will be validly issued,
fully paid and non-assessable; no holder of such shares is or will be
subject to personal liability by reason of being such a holder; the
issuance of such shares upon such conversion will not be subject to any
preemptive rights, rights of first refusal or other similar rights of
any securityholder of the Company; and one Right will be issued in
respect of each share of Common Stock issued upon conversion of the
Securities and will be evidenced by the certificate for that share of
Common Stock and each such Right has been duly authorized and, upon
issuance of such share of Common Stock, will be validly issued.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries or by or on behalf of any of FE or any of
the FE Stockholders and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price set forth in Schedule B, the aggregate principal
amount of Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional aggregate principal amount of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional $26,250,000 aggregate principal
amount of Notes at the price set forth in Schedule B. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Representatives to the Company setting forth the
number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representatives, but shall not be later than seven
full business days
17
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the Option Securities, each of the Underwriters, acting severally and not
jointly, will purchase that proportion of the total principal amount of Option
Securities then being purchased which the principal amount of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
principal amount of Initial Securities, subject in each case to such adjustments
as the Representatives in their discretion shall make to eliminate any sales or
purchases of Securities in denominations of other than $1,000 and integral
multiples thereof.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Sidley
Austin Brown & Wood LLP, 555 California Street, San Francisco, California
94104-1715, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
($1,000 and integral multiples thereof) and registered in such names as the
Representatives may request in writing at least one full business day before the
Closing Time or the relevant Date of Delivery, as the case may be. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination and packaging by the Representatives in The
City of New York not later than 10:00 A.M. (Eastern time) on the business day
prior to the Closing Time or the relevant Date of Delivery, as the case may be.
(e) Appointment of Qualified Independent Underwriter. The Company
hereby confirms its engagement of Merrill Lynch, Pierce, Fenner & Smith
Incorporated as, and Merrill
18
Lynch, Pierce, Fenner & Smith Incorporated hereby confirms its agreement with
the Company to render services as, a "qualified independent underwriter" within
the meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD") with respect to the offering and sale of
the Securities in the event that the offering and sale of the Securities is
subject to Rule 2710(c)(8) of the Conduct Rules of the NASD. Merrill Lynch,
Pierce, Fenner & Smith Incorporated, solely in its capacity as qualified
independent underwriter and not otherwise, is referred to herein as the
"Independent Underwriter". The parties hereto agree that, in consideration of
the agreement of Merrill Lynch, Pierce, Fenner & Smith Incorporated to act as
Independent Underwriter, the Independent Underwriter and the other persons
referred to in Section 6(a)(2) hereof shall be entitled to indemnity and
contribution pursuant to Sections 6 and 7 of this Agreement whether or not the
offering and sale of the Securities is subject to Rule 2710(c)(8) of the Conduct
Rules of the NASD.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will notify the Representatives
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to any Registration Statement shall become
effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to any Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of any Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus supplement and/or prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus supplement
and/or prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to any
Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in
any Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed
19
copies of each Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents
and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of each Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of each Registration
Statement and each amendment thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations, and the 1939 Act and the 1939 Act Regulations
so as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend
any Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend any Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make such Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities and the
shares of Common Stock issuable upon conversion of the Securities for
offering and sale under the applicable securities laws of such states
and other jurisdictions (domestic or foreign) as the Representatives
may designate and to maintain such qualifications in effect for a
period of not less than one year from the later of the date of this
Agreement and any Rule
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462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities or such shares of Common Stock
have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year
from the later of the date of this Agreement and any Rule 462(b)
Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for
the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectus Supplement under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect and
maintain the quotation of the shares of Common Stock issuable upon
conversion of the Securities on the Nasdaq Stock Market's National
Market and will file with the Nasdaq Stock Market's National Market all
documents and notices required by the Nasdaq Stock Market's National
Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the
Nasdaq Stock Market's National Market.
(j) Restriction on Sale of Securities and Common Stock. (A) During
the period from and including the date of this Agreement through and
including the 90th day after the date of this Agreement, the Company
will not, without the prior written consent of Merrill Lynch, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or for the sale
of, or lend or otherwise dispose of or transfer, any of its debt
securities or any securities convertible into or exercisable or
exchangeable for or repayable with any of its debt securities or file
or request or demand the filing of any registration statement under the
1933 Act with respect to any of the foregoing or cause or permit the
registration, sale or other transfer of any of the foregoing pursuant
to any registration statement which the Company has filed or may
hereafter file under the 1933 Act, or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of any of
its debt securities or any securities convertible into or exercisable
or exchangeable for or repayable with any of its debt securities,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of its debt securities or other
securities, in cash or otherwise. The foregoing sentence shall not
apply to the Securities to be sold hereunder.
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(B) During the period from and including the date of this
Agreement through and including the 90th day after the date of this
Agreement, the Company will not, without the prior written consent of
Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase or for the sale of, or lend or otherwise dispose of or
transfer any shares of Common Stock or any securities convertible into
or exercisable or exchangeable for or repayable with Common Stock or
file or request or demand the filing of any registration statement
under the 1933 Act with respect to any of the foregoing or cause or
permit the registration, sale or other transfer of any of the foregoing
pursuant to any registration statement which the Company has filed or
may hereafter file under the 1933 Act (except that up to 6,991,888
shares of Common Stock which the Company has previously issued to
acquire other businesses as described in the Prospectus under "Shares
Eligible for Future Sale" may be transferred by the holders thereof
pursuant to the First, Second or Third Shelf Registration Statement,
subject, in the case of the SFC Shares, to the lock-up agreements
referred to in Section 1(a)(xxvi) hereof), or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership
of any Common Stock or any securities convertible into or exercisable
or exchangeable for or repayable with Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Other
Securities to be sold under the Other Agreement, (B) any shares of
Common Stock issued by the Company upon the exercise of an option
outstanding on the date hereof and referred to in the Prospectus, (C)
any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus, (D) the issuance of up to 1,000,000
shares (subject to adjustment for any Common Stock splits, Common Stock
dividends, Common Stock combinations or similar events) of Common Stock
to acquire other businesses so long as those shares are issued directly
to the stockholders or other owners of those businesses and, prior to
the issuance of any such shares, each recipient of any such shares
executes and delivers to the Representatives an agreement in
substantially the form of Exhibit C hereto, which agreement shall be in
form and substance satisfactory to the Representatives and which
agreement shall be applicable through and including the 90th day after
the date of this Agreement, or (E) the issuance of the Notes and the
shares of Common Stock issuable upon conversion of the Notes.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934
Act and the 1934 Act Regulations.
(l) Preparation of Prospectus Supplement. Immediately following the
execution of this Agreement, the Company will prepare the Prospectus
Supplement containing the public offering price and other selling terms
of the Securities, the plan of distribution thereof and such other
information as may be required by the 1933 Act or the 1933 Act
Regulations or as the Representatives and the Company may deem
appropriate, and will file or transmit for filing with the Commission,
in accordance with Rule 424(b)
22
of the 1933 Act Regulations, copies of the Prospectus, including such
Prospectus Supplement.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the word processing, printing and delivery to the Underwriters of
this Agreement, any Agreement among Underwriters, the Indenture, the
certificates evidencing the Securities and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities or the issuance or delivery of the Common Stock issuable upon
conversion of the Securities, (iii) the preparation, issuance and delivery of
the certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, and the preparation,
issuance and delivery to the persons entitled thereto of the certificates for
the Common Stock issuable upon conversion of the Securities, (iv) the fees and
disbursements of the counsel, accountants and other advisors to the Company and
the Acquired Companies (provided that the Company's agreement to pay the fees
and disbursements of the counsel, accountants and other advisors to the Acquired
Companies shall not affect any agreement between the Company, on the one hand,
and any of the Acquired Companies, on the other hand, with respect to the
payment of such fees and disbursements), (v) the qualification of the Securities
and the Common Stock issuable on conversion thereof under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus and of the Prospectus and
any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplements thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Common Stock and the fees and expenses of the Trustee,
including the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review, if any, by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities, (x) the fees and
expenses incurred in connection with listing of the shares of Common Stock
issuable upon conversion of the Securities for quotation on the Nasdaq Stock
Market's National Market, (xi) the disbursements of counsel to the Underwriters
in connection with the photocopying of closing documents, and (xii) any fees
payable in connection with the rating of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the
23
Company contained in Section 1 hereof or in certificates of any officer of the
Company or any subsidiary of the Company delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statements, including any Rule 462(b) Registration Statement, have
become effective and at Closing Time (or the applicable Date of
Delivery, as the case may be) no stop order suspending the
effectiveness of any Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or, to the
knowledge of the Company, threatened by the Commission, and any request
on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. The Prospectus shall have been filed or transmitted for
filing with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations within the time period prescribed by such Rule, and prior
to Closing Time the Company shall have provided evidence satisfactory
to the Representatives of such timely filing or transmittal.
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of
Closing Time, (i) of Bass, Berry & Sims PLC, counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of
the other Underwriters, to the effect set forth in Exhibit A hereto and
to such further effect as counsel to the Underwriters may reasonably
request, and (ii) of Long, Aldridge & Norman LLP, special Georgia
counsel to the Company, Passman & Jones, P.C., special Texas counsel to
the Company, LeClair Ryan, P.C., special Virginia counsel to the
Company, Altheimer & Gray, special Illinois counsel to the Company,
Foley & Lardner, special Florida counsel to the Company and Doherty,
Wallace, Pillsbury & Murphy P.C., special Massachusetts counsel to the
Company, each in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letters
for each of the other Underwriters, to the effect set forth in Exhibits
E-1 through E-7 hereto, respectively, and to such further effect as
counsel for the Underwriters may reasonably request.
(c) Opinion of Counsel to the Acquired Companies. At Closing Time,
the Representatives shall have received the favorable opinion, dated as
of Closing Time, of Michael P. Moser, in-house counsel to FE, and of
Gibson, Dunn & Crutcher, special counsel for FE, each in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibits B-1 and B-2 hereto,
respectively and to such further effect as counsel for the Underwriters
may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Sidley Austin Brown & Wood LLP, counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters, with respect to the matters set
forth in clauses (i), (ii) (limited to this Agreement, the Indenture
and the Securities), (viii) through (x), inclusive, (xii), (xiv)
(solely as to the information in the
24
Prospectus under "Description of the Notes" and in the Base Prospectus
under "Description of Capital Stock -- Common Stock"), (xxiii), (xxiv),
(xxv) (limited, in the case of the opinion as to the absence of
personal liability of shareholders, to the charter and by-laws of the
Company and the Tennessee Business Corporation Act and, in the case of
the opinion as to the absence of preemptive or other similar rights,
limited to preemptive rights arising under the charter or by-laws of
the Company or the Tennessee Business Corporation Act) (xxvi) (limited
to preemptive rights arising under the charter or the by-laws of the
Company or the Tennessee Business Corporation Act) and (xxvii) and the
penultimate paragraph of Exhibit A hereto. In giving such opinion such
counsel may rely, as to all matters arising under or governed by the
laws of the State of Tennessee, on the opinion of Bass, Berry & Sims
PLC referred to in Section 5(b) above, and as to all matters governed
by the laws of any jurisdictions other than the law of the States of
New York and Tennessee and the federal law of the United States, upon
the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company, the Acquired Companies and
public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, (1) any material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business or (2) any material adverse change in the assets,
liabilities, financial condition, operations or present or future
relationships with customers of FE and its subsidiaries taken as a
whole, and the Representatives shall have received a certificate of the
Chairman, President or a Vice President of the Company and of the chief
financial or chief accounting officer or Vice President-Finance of the
Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of
any Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or, to their knowledge,
contemplated by the Commission.
(f) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from each of
KPMG LLP, Aaron Smith, P.C. and Deloitte & Touche LLP a letter or
letters, dated the date of this Agreement and in form and substance
satisfactory to the Representatives, together with signed or reproduced
copies of such letters for each of the other Underwriters, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information of, in the case
of KPMG LLP, the Company, in the case of Aaron Smith P.C., SFC, and in
the case of Deloitte & Touche LLP, FE and its subsidiaries contained in
the Registration Statements and the Prospectus.
25
(g) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from each of KPMG LLP, Aaron Smith, P.C. and Deloitte &
Touche LLP a letter or letters, dated as of Closing Time and in form and
substance satisfactory to the Representatives, to the effect that they reaffirm
the statements made in the respective letters furnished pursuant to subsection
(f) of this Section, except that the specified date referred to shall be a date
not more than three business days prior to Closing Time.
(h) Approval of Listing. At Closing Time, the shares of Common Stock
issuable upon conversion of the Securities shall have been approved for
inclusion in the Nasdaq Stock Market's National Market, subject only to official
notice of issuance.
(i) Lock-up Agreements. Prior to the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit C hereto signed by each of the persons listed in Sections A of Schedule
D hereto and an agreement substantially in the Form of Exhibit D hereto signed
by each of the persons listed in Section B of Schedule D hereto.
(j) Consummation of FE Acquisition. At the Closing Time, each condition
to the closing contemplated by the FE Acquisition Agreement shall have been
satisfied or waived and there shall exist at and as of the Closing Time (after
giving effect to the transactions contemplated by this Agreement and the Other
Agreement) no condition that would constitute a default (or an event that, with
notice or lapse of time or both, would constitute a default) under the FE
Acquisition Agreement. Prior to or concurrently with the purchase of the Initial
Securities by the Underwriters pursuant to this Agreement, the Certificate of
Merger, in form required by and executed in accordance with the laws of the
State of Delaware and sufficient under the laws of the State of Delaware to
effect the FE Merger as contemplated by the Prospectus, shall have been filed
with and accepted by the Secretary of State and any other governmental offices
in which such filings shall be required and the Representatives shall have
received written evidence of such filing and acceptance. Prior to or
concurrently with the purchase of the Initial Securities by the Underwriters
pursuant to this Agreement, (i) the Company shall have paid in full in cash the
purchase price (including amounts paid to the escrow agent) required pursuant to
the FE Acquisition Agreement in accordance with the terms and provisions of the
FE Acquisition Agreement, (ii) the FE Merger shall have become effective in
accordance with the laws of the State of Delaware and on the terms provided in
the FE Acquisition Agreement and described in the Prospectus, with FE surviving
the FE Merger as a wholly-owned direct or indirect subsidiary of the Company,
(iii) the Company or FE shall have repaid or otherwise discharged all
indebtedness and liabilities of FE and its subsidiaries that the pro forma
financial statements included in the Prospectus indicate are to be repaid or
satisfied in connection with the FE Merger, and (iv) the Company shall have
delivered to the Representatives such other evidence, in form and substance
satisfactory to the Representatives, as the Representatives may request to
confirm that the purchase price payable pursuant to the FE Acquisition Agreement
(including amounts paid to the escrow agent) has been paid to the parties
entitled thereto and that the other conditions specified in this paragraph shall
have been satisfied and to confirm that the FE Merger has become effective under
the laws of the State of Delaware.
26
(k) Consummation of Other Offering. Concurrently with the purchase of
the Initial Securities by the Underwriters, the Company shall have issued, and
the Other Underwriters shall have purchased and paid for, the Other Securities
being sold pursuant to the Other Agreement.
(l) Rating of Notes. Since the date of this Agreement, there shall not
have occurred a downgrading in the rating (if any) assigned to the Notes or any
of the Company's other debt by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating (if any) of the
Notes or any of the Company's other debt securities.
(m) Credit Agreement. Prior to the date of this Agreement, the
Synthetic Lease Consents shall have been duly executed by the requisite parties
thereto and, at the Closing Time, the Synthetic Lease Consents shall be
effective and in full force and effect and shall be satisfactory in form and
substance to the Representatives, and the Representatives shall have received
true, correct and complete copies thereof. Either the New Credit Agreement and
the Guaranty Agreement or the Credit Agreement Amendment shall have been duly
executed and delivered by the parties thereto and, at the Closing Time, either
the New Credit Agreement and the Guaranty Agreement or the Credit Agreement
Amendment shall be in full force and effect and shall be satisfactory in form
and substance to the Representatives, and the Representatives shall have
received true, complete and correct copies thereof.
(n) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of Delivery,
of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section 5(e)
hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinions of Bass,
Berry & Sims PLC, counsel for the Company, of each firm of local
counsel named in Section 5(b) and of Michael P. Moser, in-house counsel
to FE, each in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery (and, if applicable,
accompanied by other opinions of local counsel dated such Date of
Delivery), relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinions
required by Sections 5(b) and 5(c) hereof, except that such opinion of
Michael P. Moser may be limited to the matters set forth in clauses
(i), (ii)(B) and (v) (other than subclause (B) of clause (v)) of
Exhibit B-1 hereto.
27
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
Sidley Austin Brown & Wood LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter or letters from each of KPMG
LLP, Aaron Smith, P.C. and Deloitte & Touche LLP, each in form and
substance satisfactory to the Representatives and dated such Date of
Delivery, substantially in the same form and substance as the
respective letter or letters furnished to the Representatives pursuant
to Section 5(g) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(v) Since the date of this Agreement, there shall not have occurred a
downgrading in the rating (if any) assigned to the Notes or any of the
Company's other debt by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have
publicly announced that it has under surveillance or review its rating
(if any) of the Notes or any of the Company's other debt securities.
(o) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions contained in this Agreement, the Other
Agreement or the FE Acquisition Agreement; and all proceedings taken by the
Company, FE Acquisition Sub, FE or the FE Stockholders in connection with the
issuance and sale of the Securities as herein contemplated and in connection
with the FE Acquisition and the other transactions contemplated by the Company
Documents shall be satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(p) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
28
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. (1) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in any Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further, that
this indemnity agreement with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, liabilities, claims, damages or expenses purchased Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any such amendments
or supplements thereto, but excluding documents incorporated or deemed to be
incorporated by reference therein) was not sent or given by or on behalf of such
Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Securities to such person and if the
Prospectus (as so amended or supplemented, if applicable) would have corrected
the defect giving rise to such loss, liability, claim, damage or expense,
29
except that this proviso shall not be applicable if such defect shall have been
corrected in a document which is incorporated or deemed to be incorporated by
reference in the Prospectus.
(2) In addition to and without limitation to the Company's obligation
to indemnify Merrill Lynch, Pierce, Fenner & Smith Incorporated as an
Underwriter, the Company also agrees to indemnify and hold harmless the
Independent Underwriter and each person, if any, who controls the Independent
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act from and against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, incurred as a result of the Independent
Underwriter's participation as a "qualified independent underwriter" within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. in connection with the offering of the Securities.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed either Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a)(1) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
either Registration Statement (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Merrill Lynch expressly for use in such
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a)(1) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances; provided, that, if indemnity is
sought pursuant to Section 6(a)(2), then, in addition to the fees and expenses
of such counsel for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one counsel (in
addition to any local counsel) separate from its own counsel and that of the
other indemnified parties for the Independent Underwriter in its capacity as a
"qualified independent underwriter" and all persons, if any, who control the
Independent Underwriter
30
within the meaning of Section 15 of the 1933 Act or Section 20 of 1934 Act in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances
if, in the reasonable judgment of the Independent Underwriter, there may exist a
conflict of interest between the Independent Underwriter and the other
indemnified parties. Any such separate counsel for the Independent Underwriter
and such control persons of the Independent Underwriter shall be designated in
writing by the Independent Underwriter. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(1)(ii) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus Supplement, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
31
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that Merrill Lynch, Pierce,
Fenner & Smith Incorporated will not receive any additional benefits hereunder
for serving as the Independent Underwriter in connection with the offering and
sale of the Securities.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed any
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
32
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of FE and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the Nasdaq Stock Market's
National Market, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or on the Nasdaq Stock Market's National Market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal, California or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the aggregate principal amount of Securities to be purchased on such
date, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of Securities to be purchased on such date,
this Agreement or, with
33
respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the Underwriters to purchase and of the Company to
sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statements or Prospectus or in any other documents
or arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Syndicate
Operations; and notices to the Company shall be directed to it at 12500 West
Creek Parkway, Richmond, Virginia 23238, attention of Chief Financial Officer.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
[SIGNATURE PAGE FOLLOWS]
34
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
PERFORMANCE FOOD GROUP
COMPANY
By
_______________________________________
Robert C. Sledd
Chairman
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
FIRST UNION SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
BANC OF AMERICA SECURITIES LLC
SUNTRUST CAPITAL MARKETS, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
_______________________________________
Authorized Signatory
For themselves and as Representative of the other Underwriters named in Schedule
A hereto.
35
SCHEDULE A
Principal
Amount of
Initial
Name of Underwriter Securities
------------------- -------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................................ $ 61,075,000
First Union Securities, Inc............................................................ 61,075,000
Credit Suisse First Boston Corporation................................................. 19,800,000
Banc of America Securities LLC......................................................... 19,800,000
SunTrust Capital Markets, Inc.......................................................... 3,300,000
Lehman Brothers Inc.................................................................... 2,650,000
Salomon Smith Barney Inc............................................................... 2,650,000
U.S. Bancorp Piper Jaffray Inc......................................................... 2,650,000
BB&T Capital Markets, A division of Scott & Stringfellow, Inc.......................... 1,000,000
Davenport & Company LLC................................................................ 1,000,000
------------
Total........................................................................ $175,000,000
============
Sch A-1
SCHEDULE B
Performance Food Group Company
5-1/2% Convertible Subordinated Notes due 2008
1.The initial public offering price of the Securities shall be 100% of
the principal amount thereof, plus accrued interest, if any, from the date of
original issuance.
2.The purchase price to be paid by the Underwriters for the Securities
shall be 97% of the principal amount thereof, plus, solely in the case of any
Option Securities that are purchased on a Date of Delivery which is after the
Closing Time, accrued and unpaid interest, if any, from the Closing Time to but
excluding such Date of Delivery.
3.The interest rate on the Securities shall be 5-1/2% per annum.
4.The Securities shall be convertible into shares of Common Stock of
the Company at an initial conversion price of $32.95 per share (equivalent to a
conversion rate of approximately 30.3490 shares per $1,000 principal amount of
Securities).
5.The Securities will not be subject to redemption prior to October 16,
2004. At any time on or after October 16, 2004, the Company may redeem the
Securities for cash, in whole or, from time to time in part, on at least 30 but
not more than 60 days' prior written notice, at the following redemption prices,
together with accrued and unpaid interest to the date fixed for redemption;
provided, however, that installments of interest on Securities which are due and
payable on or prior to a redemption date will be payable to the persons who were
the registered holders of those Securities (or one or more predecessor
Securities) registered as such at the close of business on the applicable record
dates therefor according to their terms and the provisions of the Indenture. The
table below shows the redemption prices of the Securities, expressed as
percentages of their principal amount, if redeemed during the following periods:
Redemption
Price
From October 16, 2004 through October 15, 2005............... 103.1429%
From October 16, 2005 through October 15, 2006............... 102.3571%
From October 16, 2006 through October 15, 2007............... 101.5714%
Thereafter................................................... 100.7857%
Sch B-1
SCHEDULE C
Subsidiaries of the Company
Name Jurisdiction of Organization Type of Entity
-------------------------------------------- ---------------------------- ----------------------
Kenneth O. Lester Company, Inc. Tennessee Corporation
Caro Foods, Inc. Louisiana Corporation
Fresh Advantage, Inc. Virginia Corporation
Southland Distribution System, Inc. Louisiana Corporation
PFG Lester-Broadline, Inc. Tennessee Corporation
Hale Brothers/Summit, Inc. Tennessee Corporation
Pocahontas Foods, USA, Inc. Virginia Corporation
T & S Transportation of Richmond, Inc. Virginia Corporation
PFG Holding, Inc. Florida Corporation
Performance Food Group of Georgia, Inc. Georgia Corporation
Performance Food Group of Texas, L.P. Texas Limited Partnership
AFI Food Service Distributors, Inc. New Jersey Corporation
AFFLINK Incorporated Alabama Corporation
Virginia Foodservice Group, Inc. Virginia Corporation
NorthCenter Foodservice Corporation Maine Corporation
Performance Food Group Company of Texas, Inc. Texas Corporation
Carroll County Foods, Inc. Maryland Corporation
Performance Transportation Systems, Inc. Tennessee Corporation
K.C. Salad Holdings, Inc. Missouri Corporation
Alliance Foodservice, Inc. New Jersey Corporation
Redi-Cut Foods, Inc.* Illinois Corporation
* Entities whose names are followed by an asterisk constitute, collectively, the
"Redi-Cut Entities".
Sch C-1
Kansas City Salad L.L.C.* Illinois Limited Liability Company
K.C. Salad Real Estate L.L.C.* Delaware Limited Liability Company
Springfield Foodservice Corporation Massachusetts Corporation
Empire Seafood Holding Corp. Florida Corporation
Empire Imports, Inc. Florida Corporation
Empire Seafood, Inc. Florida Corporation
PFG Receivables Corporation Florida Corporation
Sch C-2
SCHEDULE D
List of Persons Subject to Lock-up
Section A. Directors and Executive Officers of the Company
1. Robert C. Sledd
2. C. Michael Gray
3. Roger L. Boeve
4. Thomas Hoffman
5. G. Thomas Lovelace, Jr.
6. John D. Austin
7. John R. Crown
8. Joseph Paterak
9. Steven V. Spinner
10. Charles E. Adair
11. Fred C. Goad, Jr.
12. Timothy M. Graven
13. H. Allen Ryan
14. John E. Stokely
Section B. Recipients of Common Stock issued and issuable in the SFC Acquisition
1. Joseph A. Cambi
2. Cambi Grantor Retained Annuity Trust
Sch D-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Tennessee.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement, the Indenture, the Securities and the other Company Documents.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the Commonwealth of Virginia and in
each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual" under
the caption "Capitalization" (except for subsequent issuances pursuant to the
Common Stock Agreement, pursuant to employee benefit plans referred to in the
Prospectus, pursuant to the exercise of options referred to in the Prospectus or
upon conversion of the Notes and except for 1,270,652 shares of Common Stock
issued to the shareholders of SFC pursuant to the SFC Acquisition Agreement);
the shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of any preemptive rights, rights of first refusal or other similar rights of any
securityholder of the Company arising under the charter or bylaws of the
Company, the Tennessee Business Corporation Act or, to our knowledge, otherwise.
(v) The Other Securities have been duly authorized for issuance and
sale to the Other Underwriters pursuant to the Other Agreement and, when issued
and delivered by the Company pursuant to the Other Agreement against payment of
the consideration set forth in the Other Agreement, will be validly issued,
fully paid and non-assessable; and no holder of the Other Securities is subject
to personal liability by reason of being such a holder under the charter or
by-laws of the Company, the Tennessee Business Corporation Act or, to our
knowledge, otherwise.
(vi) The issuance of the Other Securities is not subject to any
preemptive rights, rights of first refusal or other similar rights of any
securityholder of the Company arising under the charter or bylaws of the
Company, the Tennessee Business Corporation Act or, to our knowledge, otherwise.
(vii) Each Subsidiary (as defined below) has been duly organized and is
validly existing as a corporation, limited partnership or limited liability
company, as the case
A-1
may be, in good standing under the laws of the jurisdiction of its organization,
has power and authority as a corporation, limited partnership or limited
liability company, as the case may be, to own, lease and operate its properties
and to conduct its business and is duly qualified as a foreign corporation,
limited partnership or limited liability company, as the case may be, to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect; all of the
issued and outstanding shares of capital stock of each Subsidiary that is a
corporation have been duly authorized and validly issued and are fully paid and
non-assessable and, to the best of our knowledge, are owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; all of the partnership
interests of each Subsidiary that is a limited partnership have been duly
authorized by its partnership agreement and have been acquired by its partners
in accordance with the terms of its partnership agreement, the initial capital
contributions for such partnership interests have been paid by the partners of
such Subsidiary and, to the best of our knowledge, all of such partnership
interests are owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; all of the issued and outstanding limited liability company interests,
membership interests or other similar interests of each Subsidiary that is a
limited liability company have been duly authorized by all necessary action in
accordance with its operating agreement or limited liability company agreement,
as the case may be, and, to the best of our knowledge, all such limited
liability company interests, membership interests or similar interests, as the
case may be, are owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; and none of the outstanding shares of capital stock of Lester or
PFG-Broadline (as such terms are defined below) was issued in violation of any
preemptive rights, rights of first refusal or other similar rights of any
securityholder of such Subsidiary arising under the Organizational Documents of
such Subsidiary, the Tennessee Business Corporation Act or, to our knowledge,
otherwise. As used in this opinion, the term "Subsidiaries" means Kenneth O.
Lester Company, Inc., a Tennessee corporation ("Lester"), PFG Lester-Broadline,
Inc., a Tennessee corporation ("PFG-Broadline"), Performance Food Group of
Georgia, Inc., a Georgia corporation, Performance Food Group of Texas, L.P., a
Texas limited partnership, Performance Food Group Company of Texas, Inc., a
Texas corporation, Fresh Advantage, Inc., a Virginia corporation, Redi-Cut
Foods, Inc., an Illinois corporation, K.C. Salad Real Estate L.L.C., a Delaware
limited liability company, Empire Seafood Holding Corp., a Florida corporation,
Empire Imports, Inc., a Florida corporation, Springfield Foodservice
Corporation, a Massachusetts corporation, and FE Acquisition Sub; and the term
"Subsidiary" means any of the Subsidiaries. [IF THE OPINION IS TO BE DELIVERED
ON A DATE OF DELIVERY FOLLOWING THE CLOSING TIME, THEN THE TERM "SUBSIDIARY"
SHALL ALSO COVER FE AND ITS SIGNIFICANT SUBSIDIARIES (AS DEFINED IN EXHIBIT B-1
TO THIS AGREEMENT).]
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
A-2
(ix) Each Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; the
Prospectus has been filed pursuant to Rule 424(b) in the manner and within the
time period required by Rule 424(b); and, to the best of our knowledge, no stop
order suspending the effectiveness of any Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(x) Each Registration Statement, including any Rule 462(b) Registration
Statement, and the Prospectus, in each case excluding the documents incorporated
or deemed to be incorporated by reference therein, and each amendment or
supplement to any Registration Statement or the Prospectus, in each case
excluding the documents incorporated or deemed to be incorporated by reference
therein, as of their respective effective or issue dates (other than the
financial statements and supporting schedules and other financial data included
therein or omitted therefrom and the Trustee's Statement of Eligibility on Form
T-1, as to which we need express no opinion), complied as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xi) The documents incorporated or deemed to be incorporated by
reference in the Prospectus (other than the financial statements and supporting
schedules and other financial data included therein or omitted therefrom and the
Trustee's Statement of Eligibility on Form T-1, as to which we need express no
opinion), when they were filed with the Commission, complied as to form in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations.
(xii) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable requirements of the
Tennessee Business Corporation Act, with any applicable requirements of the
charter and by-laws of the Company and with any applicable requirements of the
Nasdaq Stock Market's National Market.
(xiii) To the best of our knowledge, except as otherwise disclosed in
the Registration Statements and the Prospectus, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation to which the
Company or any subsidiary is a party, or to which the property of the Company or
any subsidiary is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Company Documents or the performance by the
Company or FE Acquisition Sub of their respective obligations thereunder.
(xiv) The information in the Prospectus Supplement under "Prospectus
Supplement Summary -- Pending Acquisition of Fresh International Corp.",
"Prospectus Supplement Summary -- Recent Acquisitions", "Risk Factors -- Product
liability claims could have an adverse effect on our business", "Risk Factors --
Our shareholder rights plan, charter and bylaws could make it difficult for a
third party to acquire our company",
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"Risk Factors -- Our issuance of preferred stock could adversely affect holders
of our common stock and discourage a takeover", "Risk Factors -- Future sales of
our common stock in the public market could adversely affect our stock price and
our ability to raise funds in new stock offerings", "Risk Factors - Our ability
to repurchase notes following a change of control event or in other
circumstances may be limited", "Risk Factors -- The notes will be subordinated
to our existing and future Senior Indebtedness", "Business -- Regulation",
"Business -- Legal Proceedings", "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources", "Description of Capital Stock", "Shares Eligible for Future Sale",
"Description of the Notes" and "Certain United States Federal Income Tax
Considerations", the information in the Base Prospectus under "Description of
Debt Securities" and "Description of Capital Stock", the information in Item 2
of the Company's Current Report on 8-K filed with the Commission on or about
September 10, 2001, the information in Item 2 of the Company's Current Report on
Form 8-K/A filed with the Commission on or about September 13, 2001, the
information in Item 2 of the Company's Current Report on Form 8-K/A filed with
the Commission on or about September 28, 2001, the information in Item 2 of the
Company's Current Report on Form 8-K/A filed with the Commission on or about the
date of the Purchase Agreement, the information in the Company's Annual Report
on Form 10-K for its fiscal year ended December 30, 2000 under
"Business-Regulation" and "Legal Proceedings", the information in Item 1 of Part
II of the Company's Quarterly Reports on Form 10-Q for the quarters ended March
31, 2001 and June 30, 2001, the information in the Company's proxy statement
issued on or about April 6, 2001 under "Executive Compensation-Director
Compensation", "Executive Compensation-Change in Control Agreements" and
"Certain Transactions", and the information in the Registration Statement under
Item 15, to the extent that it constitutes matters of law, summaries of legal
matters, summaries of provisions of the Company's charter or bylaws, the
Securities, the Indenture or any of the other Company Documents, the SFC
Acquisition Agreement, the Rights Agreement or any other instruments or
agreements, summaries of legal proceedings, or legal conclusions, has been
reviewed by us and is correct in all material respects.
(xv) All descriptions in the Registration Statements and the Prospectus
of contracts and other documents to which the Company or any of its subsidiaries
is a party are accurate in all material respects.
(xvi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than (A) under the 1933 Act and the 1933 Act
Regulations and the 1939 Act, which have been obtained or made, as the case may
be, (B) under the HSR Act in connection with the FE Acquisition, which have been
obtained, (C) in the event of a repurchase of Notes upon a Change of Control,
such as may be required under the 1934 Act or the 1934 Act Regulations or, in
the event that the Company pays the Change of Control repurchase price with
shares of Common Stock, such as may be required under the 1933 Act or the 1933
Act Regulations in connection with the issuance of those shares, (D) the filing
of the Certificate of Merger with the Delaware Secretary of State, which we have
been advised has occurred, or (E) such as may be required under the securities
or blue sky laws of the various states, as to which we need express no opinion),
and no
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authorization, approval, vote or other consent of any stockholders of the
Company or FE Acquisition Sub (except such as have been obtained), is necessary
or required in connection with the due authorization, execution and delivery of
any of the Company Documents, for the offering, issuance, sale or delivery of
the Securities, for the issuance of the shares of Common Stock upon conversion
of the Notes, for the consummation of the FE Acquisition or for the performance
by the Company or FE Acquisition Sub of any of their respective obligations
under any of the Company Documents.
(xvii) The execution, delivery and performance of the Company Documents
and the consummation of the transactions contemplated in the Company Documents,
the Prospectus and the Registration Statements (including (A) the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities and the Other Securities as described in the Prospectus under the
caption "Use Of Proceeds," (B) the consummation of the FE Acquisition and (C)
the issuance of the shares of Common Stock upon conversion of the Notes) and
compliance by the Company and, in the case of the FE Acquisition Agreement, FE
Acquisition Sub with their respective obligations under the Company Documents do
not and will not, whether with or without the giving of notice or lapse of time
or both, conflict with or constitute a breach of, or default or Repayment Event
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, (x) any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument, to which the
Company or any subsidiary is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any subsidiary is
subject and which has been filed or incorporated by reference as an exhibit to
any Registration Statement or as an exhibit to any document incorporated or
deemed to be incorporated by reference in any Registration Statement or (y) any
reimbursement agreement, credit agreement, loan agreement, indenture, note
purchase agreement, pledge agreement, lease agreement, participation agreement
or other instrument or agreement (or any amendment or supplement to any of the
foregoing) relating to any of the Company's bank credit facilities, synthetic
lease facilities, receivables purchase facility or 6.77% notes due 2010, or the
$7,000,000 Tax-Exempt Multi-Modal Industrial Development Revenue Bonds (K.C.
Salad Real Estate, LLC Project) Series 1999 issued by the Industrial Development
Authority of the County of Clay, Missouri (except for such conflicts, breaches
or defaults or liens, charges or encumbrances for which a written consent or
waiver, signed by the appropriate party or parties, has been obtained and which
will be effective upon closing of the offerings contemplated by the Purchase
Agreement and the Other Agreement, except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect and except that, as disclosed in the Prospectus, the Company's
ability to repurchase the Notes for cash upon a Change of Control (as defined in
the Indenture) may be limited by restrictive covenants in instruments and
agreements to which the Company is a party), nor will such action result in any
violation of the provisions of the Organizational Documents of the Company or
any subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their respective properties, assets or
operations. We have received a certificate signed by the Executive Vice
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President and Chief Financial Officer of the Company to the effect that the
agreements and instruments filed as exhibits to the Registration Statements or
as exhibits to the documents incorporated or deemed to be incorporated by
reference in the Registration Statements constitute all of the material
agreements and instruments to which the Company or any subsidiary is a party or
by which it or any of them may be bound or to which any of the property or
assets of the Company or any subsidiary is subject.
(xviii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
(xix) To our knowledge, one Right has been issued in respect of each
outstanding share of Common Stock and is evidenced by the certificate for that
share of Common Stock and each such Right has been duly authorized and validly
issued; and one Right will be issued in respect of each share of Common Stock
issued and sold to the Underwriters pursuant to the Common Stock Agreement and
will be evidenced by the certificate for that share of Common Stock and each
such Right has been duly authorized, and upon issuance of such share of Common
Stock, will be validly issued.
(xx) The FE Acquisition Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement of, each of the Company
and the FE Acquisition Sub, enforceable in accordance with its terms, except as
enforcement thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; the Certificate
of Merger has been duly authorized, executed and delivered by FE Acquisition
Sub; the Certificate of Merger is in the form required by, and has been executed
in accordance with, the General Corporation Law of the State of Delaware (the
"DGCL") and is sufficient under the DGCL to effect the FE Merger as contemplated
by the Prospectus; upon the filing of the Certificate of Merger with the
Secretary of State, the FE Merger will become effective and FE shall become a
wholly-owned direct or indirect subsidiary of the Company, and each outstanding
share of FE's outstanding capital stock will be converted into the right to
receive the merger consideration payable pursuant to the FE Acquisition
Agreement, except for shares owned by stockholders who have perfected their
appraisal rights under the DGCL.
(xxi) The Notes and the Indenture contain provisions which state that
they are to be governed by New York law. Such counsel believes that a Tennessee
court would find such choice of law provision to be enforceable. If,
notwithstanding that choice of law provision, a court were to find that
Tennessee law governs the Notes or the Indenture, the Notes would not violate
the Tennessee usury law or any other limitations on the rate of interest or
yield thereon under the laws of the State of Tennessee.
(xxii) The New Credit Agreement or the Credit Agreement Amendment, as
the case may be, has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, the Company, enforceable in accordance with its
terms, except as enforcement thereof may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
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(xxiii) The Indenture has been duly authorized, executed and delivered
by the Company and (assuming due authorization, execution and delivery thereof
by the Trustee) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(xxiv) The Securities are in substantially the form contemplated by the
Indenture, have been duly authorized and executed by the Company and, when duly
authenticated by the Trustee in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters pursuant to the Purchase
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles, will be
convertible at the option of the holders thereof into shares of Common Stock in
accordance with the terms of the Securities and the Indenture, and will be
entitled to the benefits of the Indenture.
(xxv) (A) The shares of Common Stock issuable upon conversion of the
Securities have been duly authorized and reserved for issuance by the Company
upon such conversion by all necessary corporate action on the part of the
Company and such shares, when duly issued upon such conversion in accordance
with the terms of the Indenture and the Securities, will be validly issued,
fully paid and non-assessable; (B) no holder of Common Stock issuable upon
conversion of Securities is or will be subject to personal liability by reason
of being such a holder under the charter or by-laws of the Company, the
Tennessee Business Corporation Act or, to our knowledge, otherwise; and (C) the
issuance of the shares of Common Stock upon conversion of the Securities is not
subject to preemptive rights, rights of first refusal or other similar rights of
any securityholder of the Company arising under the charter or bylaws of the
Company, the Tennessee Business Corporation Act or, to our knowledge, otherwise.
(xxvi) The issuance of the Securities is not subject to the preemptive
rights, rights of first refusal or other similar rights of any securityholder of
the Company arising under the charter or bylaws of the Company, the Tennessee
Business Corporation Act or, to our knowledge, otherwise.
(xxvii) The Indenture has been duly qualified under the 1939 Act.
Nothing has come to our attention that would lead us to believe that
any Registration Statement or any amendment thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom and the Trustee's Statement of
Eligibility on Form T-1, as to which we need make no statement), at the time
such Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
A-7
misleading or that the Prospectus or any amendment or supplement thereto (except
for financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we need make
no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the date of this opinion,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel shall state (A) that such
opinion is limited to matters arising under the laws of the States of Tennessee,
the DGCL, the Limited Liability Company Act of the State of Delaware and the
federal laws of the United States of America and, solely with respect to the
matters relating to the Subsidiaries, the corporate laws of the States of
Georgia, Virginia, Florida and Massachusetts, the corporate and partnership laws
of the State of Texas, and the corporate laws of the State of Illinois, and (B)
that, in rendering their opinion pursuant to the Purchase Agreement, Sidley
Austin Brown & Wood LLP may rely upon such opinion as if it were addressed to
them. In rendering such opinion, Bass, Berry & Sims PLC (i) shall state that
they have relied, as to matters relating to the Subsidiaries arising under or
governed by the corporate laws of the States of Georgia, Virginia, Florida and
Massachusetts, the corporate and partnership laws of the State of Texas and the
corporate laws of the State of Illinois, upon the opinions of local counsel
delivered pursuant to Section 5(b) (or, if the opinion is being delivered on a
Date of Delivery following the Closing Time, Section 5(n)(ii)) of the Purchase
Agreement, and, may rely as to matters involving the application of the laws of
any other state upon the opinion of local counsel satisfactory to the
Representatives (all of which opinions shall be dated the same date as the
opinion of Bass, Berry & Sims PLC and furnished to the Representatives at the
same time as such opinion of Bass, Berry & Sims PLC, shall be satisfactory in
form and substance to counsel for the Underwriters and shall be addressed to
them or shall expressly state that the Underwriters may rely on such opinions as
if they were addressed to them), provided that Bass, Berry & Sims PLC shall
state in their opinion that they believe that they and the Underwriters are
justified in relying upon each such opinion and (ii) as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company, FE and public officials. In rendering such
opinion, Bass, Berry & Sims PLC shall state that, insofar as such opinion
concerns (A) the Securities, the Indenture or any other instrument or agreement
that by its terms is to be governed by the laws of the State of New York or (B)
the New Credit Agreement or the Credit Agreement Amendment, as the case may be
(each of which by its terms is to be governed by the laws of the State of North
Carolina), they have assumed, to the extent relevant to their opinion, that the
laws of the State of New York and the State of North Carolina, as the case may
be, are the same as the laws of the State of Tennessee. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
A-8
Exhibit B-1
FORM OF OPINION OF MICHAEL P. MOSER,
IN-HOUSE COUNSEL TO FE,
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) Fresh International Corp., a Delaware corporation ("Fresh
International") is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite corporate
power and authority to own, lease, and operate its properties as now owned,
leased, and operated and to conduct its business as now conducted and is duly
qualified to do business and in good standing in the State of California and in
any other jurisdictions in which the character of its properties or the
transaction of its business requires such qualification.
(ii)(A) The authorized capital stock of Fresh International consists of
40,000 shares of common stock, no par value per share (the "Fresh International
Common Stock"), of which 5,976.5 shares are issued and outstanding and, to my
knowledge, no options, warrants, or other rights to purchase, agreements or
other obligations to issue, or other rights to convert any obligations into any
shares of capital stock or other ownership interest in Fresh International are
outstanding, and (B) all of the issued and outstanding shares of Fresh
International common stock have been duly authorized, and are validly issued,
fully paid, and nonassessable, and none of such shares has been issued in
violation of the preemptive rights of any person arising under the charter or
by-laws of Fresh International, the Delaware General Corporation Law (the
"DGCL") or, to my knowledge, otherwise.
(iii) The execution, delivery, and performance by Fresh International
of the Agreement, the Agreement of Merger and the Escrow Agreement do not result
in a violation of, or constitute a default under, (i) any provision of Fresh
International's charter, bylaws or other organizational documents, (ii) any
applicable federal, California or Delaware statute, rule, or regulation which is
normally applicable to transactions of the type contemplated by such documents,
or (iii) to my knowledge, any decree, order, judgement, writ or injunction of
any court of the States of California or Delaware or any federal court of the
United States of America.
(iv) No authorization, approval or consent of, exemption or other
action by, or registration or filing with, any state or federal authority or, to
my knowledge, any non-governmental person or entity, is required on the part of
Fresh International in connection with the execution, delivery and performance
by Fresh International of its obligations under the Agreement, other than (i)
such authorizations, approvals, consents, exemptions, registrations or filings
which have been made or obtained prior to the date hereof, (ii) where the
failure to make or obtain any of such authorizations, approvals, consents,
exemptions, registrations or filings would not have a material and adverse
effect on Fresh International, and (iii) the filing of the Agreement of Merger
with the Secretary of State of the State of Delaware.
(v) Each Significant Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to own, lease and operate
its properties as now owned, leased or operated and to
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conduct its business as now conducted and is duly qualified to do business and
in good standing in any other jurisdictions in which the character of its
property or the transaction of its business requires such qualifications; and
all of the issued and outstanding shares of capital stock of each Significant
Subsidiary (A) have been duly authorized and are validly issued, fully paid and
nonassessable and (B) are owned, directly or indirectly, by Fresh International,
free and clear, to my knowledge, of all security interests, liens, claims and
other encumbrances; and none of such shares has been issued in violation of the
preemptive rights of any person arising under the charter or by-laws of such
Significant Subsidiary, the DGCL or, to my knowledge, otherwise. As used in this
opinion letter, the term "Significant Subsidiary" has the meaning set forth in
Rule 1-02 of Regulation S-X promulgated by the Securities and Exchange
Commission.
(vi) The Merger has been duly approved by vote of the holders of the
requisite percentage of the outstanding capital stock of Fresh International at
a meeting duly called and held, all in accordance with the charter and bylaws of
Fresh International and the DGCL.
Nothing has come to my attention that would lead me to believe that the
Prospectus or any amendment or supplement thereto (but only to the extent that
the Prospectus or any such amendment or supplement relates to Fresh
International or any of its subsidiaries and excluding financial statements and
schedules and other financial data), as of the date of the Prospectus, as of the
date of any such amendment or supplement or as of the date of this opinion,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. As
used in this paragraph, the term "Prospectus" means, collectively, the
Prospectus Supplement dated October 10, 2001 relating to common stock and the
Prospectus Supplement dated October 10, 2001 relating to convertible
subordinated notes of Performance Food Group Company.
Such opinion shall be addressed to the Underwriters and shall state
that all capitalized terms used therein and not defined shall have the
respective meanings specified in the FE Acquisition Agreement. In rendering such
opinion, such counsel shall state that such opinion covers matters arising under
the laws of the State of California, Delaware corporate laws and the federal
laws of the United States of America. In addition, in the event that such
counsel shall render such opinion on a Date of Delivery which is after the
Closing Time, such opinion need only cover the matter set forth in clauses (i),
(ii)(B) and (v) (other than subclause (B) of clause (v)) above, and such opinion
shall state that Bass, Berry & Sims, PLC, in rendering their opinion pursuant to
the Purchase Agreement, may rely upon such opinion as if it were addressed to
them. In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent he deems proper, on
certificates of responsible officers of Fresh International and public
officials. Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
B-2
Exhibit B-2
FORM OF OPINION OF GIBSON, DUNN & CRUTCHER
TO BE DELIVERED PURSUANT TO SECTION 5(c)
1. Fresh International Corp., a Delaware corporation (the "Company"),
has all necessary corporate and other power and authority to enter into, to
carry out its obligations under, and to consummate the transactions contemplated
by, the Merger Agreement, the Agreement of Merger and the Escrow Agreement
(collectively, the "Transaction Documents"). Each of the Transaction Documents
has been duly and validly authorized by all necessary corporate action on the
part of the Company. Each of the Transaction Documents has been duly and validly
executed and delivered by the Company.
2. Assuming that all necessary corporate action in respect of the
Merger have been duly and validly taken by Parent and Acquisition Sub, then upon
filing and acceptance of the Agreement of Merger, the Merger will have been
validly effected in accordance with the DGCL.
Such opinion shall state that capitalized terms used therein and not
defined shall have the respective meanings specified in the FE Acquisition
Agreement. In rendering such opinion, such counsel shall state that such opinion
covers matters arising under the laws of the State of California, the General
Corporation Law of the State of Delaware and the federal laws of the United
States of America. In rendering such opinion, such counsel may rely, as to
matters of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of the FE and public officials.
Such opinion shall not state that it is to be governed or qualified by, or that
it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
B-1
Exhibit C
DIRECTOR AND OFFICER LOCK-UP AGREEMENT
______________________, 2001
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
First Union Securities, Inc.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
SunTrust Capital Markets, Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Performance Food Group Company
Ladies and Gentlemen:
The undersigned, a shareholder and, if applicable, an officer and/or
director of Performance Food Group Company, a Tennessee corporation (the
"Company"), understands that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch") and certain other underwriters propose to
enter into one or more Purchase Agreements to be dated the same date
(collectively, the "Purchase Agreement") with the Company providing for the
public offering of shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), and/or the public offering of debt securities, which
may be convertible into Common Stock, of the Company. In recognition of the
benefit that such an offering or offerings, as the case may be, will confer upon
the undersigned as a shareholder and, if applicable, an officer and/or director
of the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during the period from
and including the date of this agreement through and including the 90th day
after the date of the Purchase Agreement, the
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undersigned will not, without the prior written consent of Merrill Lynch,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or for the sale of, or lend or
otherwise dispose of or transfer, any shares of the Company's Common Stock or
any securities convertible into or exchangeable or exercisable for or repayable
with Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file or demand or request that the Company file any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing, or otherwise include any of the foregoing in any registration
statement filed by the Company under the Securities Act of 1933, as amended, or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of any Common Stock, whether any such swap or transaction described
in (i) or (ii) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
[Signature Page Follows]
C-2
Very truly yours,
Signature:
__________________________________
Print Name:
__________________________________
C-3
Exhibit D
LOCK-UP AGREEMENT FOR JOSEPH A. CAMBI
______________________, 2001
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
First Union Securities, Inc.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
SunTrust Capital Markets, Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Performance Food Group Company
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Merger dated as of July
25, 2001 (the "Acquisition Agreement") among Performance Food Group Company, a
Tennessee corporation (the "Company"), SFC Acquisition, Inc., a Massachusetts
corporation, Springfield Foodservice Corporation, a Massachusetts corporation
("SFC"), and the shareholders of SFC. The undersigned acknowledges that, in
connection with the transactions contemplated by the Acquisition Agreement, the
undersigned will receive shares of the Company's common stock, par value $.01
per share (the "Common Stock"), and further acknowledges that, pursuant to the
Acquisition Agreement, the undersigned has agreed or otherwise is required, as
the case may be, to enter into this agreement. The undersigned understands that
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and certain other underwriters propose to enter into one or
more Purchase Agreements to be dated the same date (collectively, the "Purchase
Agreement") with the Company providing for the public offering of shares (the
"Shares") of the Company's Common Stock and/or the public offering of debt
securities, which may be convertible into Common Stock, of the Company (the
"Debt Securities"), and that the Company will use all or a portion of the net
proceeds it receives from the public offering of the
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Shares and/or Debt Securities, as the case may be, to refinance indebtedness
incurred by the Company to pay all or a portion of the purchase price paid by
the Company to acquire SFC. In recognition of the benefit that such an offering
will confer upon the undersigned, and in consideration of the mutual covenants
and agreements set forth in the Acquisition Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter (collectively, the
"Underwriters") to be named in the Purchase Agreement that, during the period
from and including the date of this agreement through and including the 90th day
after the date of the Purchase Agreement, the undersigned will not, without the
prior written consent of Merrill Lynch, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or for the sale of, or lend or otherwise dispose of or transfer, any
shares of the Company's Common Stock or any securities convertible into or
exchangeable or exercisable for or repayable with Common Stock, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file or
demand or request that the Company file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing, or
otherwise include any of the foregoing in any registration statement filed by
the Company under the Securities Act of 1933, as amended, or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of any
Common Stock, whether any such swap or transaction described in (i) or (ii)
above is to be settled by delivery of Common Stock or other securities, in cash
or otherwise.
Notwithstanding the foregoing, (A) the undersigned's
obligations under this agreement (i) shall terminate on the day that is the 20th
day after the date of this agreement unless, on or prior to such 20th day, all
of the persons listed below, whom the undersigned acknowledges and agrees
constitute all of the executive officers and directors of the Company, have
executed or are otherwise bound by substantially similar agreements (the "Other
Agreements") (which need not, however, include a paragraph similar to this
paragraph, which may provide for a different lock-up period (so long as such
lock-up period does not end prior to the 90th day after the date of the Purchase
Agreement), and which may otherwise be more favorable to the Underwriters than
this agreement) and (ii) shall, in any event, terminate on the day that is the
120th day after the date of this agreement; and (B) the undersigned may sell up
to 200,000 shares of Common Stock so long as such shares are sold through
Merrill Lynch acting as broker or dealer, the trade date for all such sales
shall be on or prior to September 13, 2001 and the settlement date for any such
sale shall be no later than four trading days after the trade date for such
sale. In the event that any shares of Common Stock held by any such executive
officer or director are released from the lock-up restrictions set forth in the
Other Agreement to which he or she is a party or by which he or she is bound,
the same number of the shares of Common Stock held by the undersigned shall be
immediately and fully released from any remaining lock-up restrictions hereunder
concurrently therewith. The undersigned acknowledges and agrees that the
following are all of the executive officers and directors of the Company:
1. Robert C. Sledd
2. C. Michael Gray
3. Roger L. Boeve
4. Thomas Hoffman
D-2
5. G. Thomas Lovelace, Jr.
6. John D. Austin
7. John R. Crown
8. Joseph Paterak
9. Steven Spinner
10. Charles E. Adair
11. Fred C. Goad, Jr.
12. Timothy M. Graven
13. H. Allen Ryan
14. John E. Stokely
Very truly yours,
Signature:
_____________________________________
Joseph A. Cambi
D-3
LOCK-UP AGREEMENT FOR CAMBI TRUST
______________________, 2001
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
First Union Securities, Inc.
Credit Suisse First Boston Corporation
Banc of America Securities LLC
SunTrust Capital Markets, Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Performance Food Group Company
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Merger dated as of July
25, 2001 (the "Acquisition Agreement") among Performance Food Group Company, a
Tennessee corporation (the "Company"), SFC Acquisition, Inc., a Massachusetts
corporation, Springfield Foodservice Corporation, a Massachusetts corporation
("SFC"), and the shareholders of SFC. The undersigned acknowledges that, in
connection with the transactions contemplated by the Acquisition Agreement, the
undersigned will receive shares of the Company's common stock, par value $.01
per share (the "Common Stock"), and further acknowledges that, pursuant to the
Acquisition Agreement, the undersigned has agreed or otherwise is required, as
the case may be, to enter into this agreement. The undersigned understands that
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and certain other underwriters propose to enter into one or
more Purchase Agreements to be dated the same date (collectively, the "Purchase
Agreement") with the Company providing for the public offering of shares (the
"Shares") of the Company's Common Stock and/or the public offering of debt
securities, which may be convertible into Common Stock, of the Company (the
"Debt Securities"), and that the Company will use all or a portion of the net
proceeds it receives from the public offering of the Shares and/or Debt
Securities, as the case may be, to refinance indebtedness incurred by the
Company to pay all or a portion of the purchase price paid by the Company to
acquire SFC. In recognition of the benefit that such an offering will confer
upon the undersigned, and in
D-4
consideration of the mutual covenants and agreements set forth in the
Acquisition Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
with each underwriter (collectively, the "Underwriters") to be named in the
Purchase Agreement that, during the period from and including the date of this
agreement through and including the 90th day after the date of the Purchase
Agreement, the undersigned will not, without the prior written consent of
Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or for the sale of, or
lend or otherwise dispose of or transfer, any shares of the Company's Common
Stock or any securities convertible into or exchangeable or exercisable for or
repayable with Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file or demand or request that the Company file any
registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing, or otherwise include any of the foregoing in
any registration statement filed by the Company under the Securities Act of
1933, as amended, or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of any Common Stock, whether any such swap or
transaction described in (i) or (ii) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise.
Notwithstanding the foregoing, the undersigned's obligations under this
agreement (i) shall terminate on the day that is the 20th day after the date of
this agreement unless, on or prior to such 20th day, all of the persons listed
below, whom the undersigned acknowledges and agrees constitute all of the
executive officers and directors of the Company, have executed or are otherwise
bound by substantially similar agreements (the "Other Agreements") (which need
not, however, include a paragraph similar to this paragraph, which may provide
for a different lock-up period (so long as such lock-up period does not end
prior to the 90th day after the date of the Purchase Agreement), and which may
otherwise be more favorable to the Underwriters than this agreement) and (ii)
shall, in any event, terminate on the day that is the 120th day after the date
of this agreement. In the event that any shares of Common Stock held by any such
executive officer or director are released from the lock-up restrictions set
forth in the Other Agreement to which he or she is a party or by which he or she
is bound, the same number of the shares of Common Stock held by the undersigned
shall be immediately and fully released from any remaining lock-up restrictions
hereunder concurrently therewith. The undersigned acknowledges and agrees that
the following are all of the executive officers and directors of the Company:
1. Robert C. Sledd
2. C. Michael Gray
3. Roger L. Boeve
4. Thomas Hoffman
5. G. Thomas Lovelace, Jr.
6. John D. Austin
7. John R. Crown
8. Joseph Paterak
9. Steven Spinner
10. Charles E. Adair
11. Fred C. Goad, Jr.
D-5
12. Timothy M. Graven
13. H. Allen Ryan
14. John E. Stokely
Cambi Grantor Retained Annuity Trust
By:
________________________________________
Laurie J. Hall
Trustee
D-6
Exhibit E-1
FORM OF GEORGIA COUNSEL OPINION TO BE DELIVERED
PURSUANT TO SECTION 5(b)
(i) Performance Food Group of Georgia, Inc., a Georgia corporation (the
"Subsidiary"), was duly organized as a corporation, and is validly
existing and in good standing, under the laws of the State of Georgia.
The Subsidiary has the corporate power to own, lease and use its assets
and to conduct its business as described in the Prospectus; all of the
issued and outstanding shares of capital stock of the Subsidiary have
been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of
the Subsidiary was issued in violation of any preemptive rights, or to
our knowledge, rights of first refusal of any securityholder of the
Subsidiary.
In rendering such opinion, such counsel shall state that such opinion
is limited to matters arising under the laws of the State of Georgia and that,
in rendering their opinion pursuant to the Purchase Agreement, Bass, Berry &
Sims PLC may rely upon such opinion of local counsel. In rendering such opinion,
such local counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Subsidiary and the Company. Such opinion shall not state that it
is to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
E-1-1
Exhibit E-2
FORM OF TEXAS COUNSEL OPINION TO BE DELIVERED
PURSUANT TO SECTION 5(b)
(i) Performance Food Group Company of Texas, Inc., a Texas corporation
("Performance Food, Inc.") has been duly organized and is validly
existing as a Texas corporation and is in good standing under the laws
of the State of Texas.
(ii) Performance Food Group of Texas, L.P., a Texas limited partnership
("Performance Food, L.P.") has been duly organized and is validly
existing as a Texas limited partnership under the laws of the State of
Texas.
(iii) Performance Food, Inc. has the requisite corporate power and authority
to own, lease and operate its properties and to conduct its business as
currently conducted.
(iv) Performance Food, L.P. has the requisite limited partnership power and
authority to own, lease and operate its property and conduct its
business as currently conducted.
(v) All of the issued and outstanding shares of capital stock of
Performance Food, Inc. have been duly authorized and validly issued and
are fully paid and non-assessable.
(vi) All of the partnership interests of Performance Food, L.P. have been
duly authorized by its partnership agreement and have been acquired by
the partners of Performance Food, L.P. in accordance with the terms of
its partnership agreement and the initial capital contributions for
such partnership interests have been paid by the partners of
Performance Food, L.P.
(vii) None of the outstanding shares of capital stock of Performance Food,
Inc. was issued in violation of any preemptive rights or rights of
first refusal or similar rights of any security holder of Performance
Food, Inc. specifically granted to such security holder under its
Organizational Documents or the laws of the State of Texas or, to our
actual knowledge, by any other agreement.
(viii) None of the outstanding partnership interests of Performance Food, L.P.
was issued in violation of any preemptive rights or rights of first
refusal or similar rights of any security holder of Performance Food,
L.P. specifically granted to such security holder under its
Organizational Documents or the laws of the State of Texas or, to our
actual knowledge, by any other agreement.
(ix) To our actual knowledge, Performance Food, Inc. is not in violation of
its Organizational Documents.
(x) To our actual knowledge, Performance Food, L.P. is not in violation of
its Organizational Documents.
In rendering such opinion, such counsel shall state that such opinion
is limited to matters arising under the laws of the State of Texas and that, in
rendering their opinion pursuant to the
E-2-1
Purchase Agreement, Bass, Berry & Sims PLC may rely upon such opinion of local
counsel. In rendering such opinion, such local counsel may rely as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Subsidiaries and the Company. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
E-2-2
Exhibit E-3
FORM OF VIRGINIA COUNSEL OPINION TO BE DELIVERED
PURSUANT TO SECTION 5(b)
(i) Fresh Advantage, Inc., a Virginia corporation (the "Subsidiary"), has
been duly organized and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Virginia and has the
power and authority as a corporation to own, lease and operate its
properties and to conduct its business as currently conducted; all of
the issued and outstanding shares of capital stock of the Subsidiary
have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of
the Subsidiary was issued in violation of any preemptive rights, rights
of first refusal or similar rights of any securityholder of the
Subsidiary arising under the Subsidiary's Organizational Documents, the
laws of the Commonwealth of Virginia or, to our knowledge, otherwise.
(ii) To the best of our knowledge, the Subsidiary is not in violation of its
Organizational Documents.
In rendering such opinion, such counsel shall state that such opinion
is limited to matters arising under the laws of the Commonwealth of Virginia and
that, in rendering their opinion pursuant to the Purchase Agreement, Bass, Berry
& Sims PLC may rely upon such opinion of local counsel. In rendering such
opinion, such local counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Subsidiary and the Company. Such opinion shall not state that it
is to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
E-3-1
Exhibit E-4
[Omitted Intentionally]
E-4-1
Exhibit E-5
FORM OF ILLINOIS COUNSEL OPINION TO BE DELIVERED
PURSUANT TO SECTION 5(b)
(i) Redi-Cut Foods, Inc., an Illinois corporation ("Redi-Cut"), has been
incorporated and is validly existing as a corporation under the laws of
the State of Illinois and has the requisite corporate power and
authority to own, lease, and operate its properties as now owned or
leased, as the case may be, and operated and to conduct its business as
now conducted and is qualified to do business and in good standing in
Illinois.
(ii) K.C. Salad Real Estate L.L.C., a Delaware limited liability company
("KC Real Estate"), has been organized and is validly existing as a
limited liability company under the laws of the State of Delaware and
has the requisite limited liability company power and authority to own,
lease and operate its properties as now owned or leased, as the case
may be, and operated and to conduct its business as now conducted and
is qualified to do business and in good standing in Delaware and
Missouri.
(iii) All of the issued and outstanding shares of common stock of Redi-Cut
have been duly authorized and validly issued and are fully paid and
non-assessable, and none of the outstanding shares of common stock of
Redi-Cut were issued in violation of any preemptive rights, rights of
first refusal or similar rights of any person which in each case are
granted under the applicable corporate statute or the Organizational
Documents of Redi-Cut.
(iv) All of the issued and outstanding membership interests in KC Real
Estate have been duly authorized by all necessary action on the part of
KC Real Estate and duly issued in accordance with the operating
agreement of KC Real Estate; and none of the outstanding membership
interests in KC Real Estate were issued in violation of any preemptive
rights, rights of first refusal or similar rights of any person which
in each case are granted under the applicable limited liability company
statute or the Organizational Documents of KC Real Estate.
In rendering such opinion, such counsel shall state that such opinion
is limited to matters arising under the laws of the State of Illinois and that,
in rendering their opinion pursuant to the Purchase Agreement, Bass, Berry &
Sims PLC may rely upon such opinion of local counsel. In rendering such opinion,
such local counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Subsidiary and the Company. Such opinion shall not state that it
is to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
E-5-1
Exhibit E-6
FORM OF FLORIDA COUNSEL OPINION TO BE DELIVERED
PURSUANT TO SECTION 5(b)
(i) Each of Empire Seafood Holding Corp., a Florida corporation, and Empire
Imports, Inc., a Florida corporation (each, a "Subsidiary" and,
collectively, the "Subsidiaries"), has been incorporated as a
corporation under the laws of the State of Florida and its status is
active, which means that (a) all fees and penalties owed to the
Department of State have been paid, (b) each Subsidiary's most recent
annual report has been delivered to the Department of State, (c)
neither Subsidiary has filed articles of dissolution and (d) each
Subsidiary is in existence under the Florida Business Corporation Act.
Each Subsidiary has the corporate power and authority to own, lease and
operate its properties and to conduct its business as currently
conducted.
(ii) The 500 shares of capital stock of Empire Seafood Holding Corp.
represented by Certificate No. 6 issued in the name of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable. The 1,000 shares of capital stock of Empire Imports,
Inc. represented by Certificate No. 3 issued in the name of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable. None of the outstanding shares of capital stock of
either Subsidiary was issued in violation of any preemptive rights,
rights of first refusal or similar rights of any securityholder of such
Subsidiary arising under the laws of the State of Florida, or arising
under such Subsidiary's articles of incorporation or by-laws or, to our
knowledge, otherwise.
In rendering such opinion, such counsel shall state that such opinion
is limited to matters arising under the laws of the State of Florida and that,
in rendering their opinion pursuant to the Purchase Agreement, Bass, Berry &
Sims PLC may rely upon such opinion of local counsel. In rendering such opinion,
such local counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Subsidiaries and the Company. Such opinion shall not state that
it is to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
E-6-1